Safaricom takes profit hit on free M-PESA transactions
Safaricom has posted Kes 33.1 billion net profit after tax for the half year, a six per cent decline from Kes.35.6 billion last year on zero rating of M-Pesa transactions since March this year.
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Mpesa revenue declined 14.5 per cent to Kes35.9 billion from kes42 billion last year with kes4.5 billion decline in transfers and Kes1.6 billion decline in payments impacted by the free fees.
Central Bank of Kenya imposed a waiver on fees for mobile transactions in mid-March to reduce cash payments to curb the spread of coronavirus.
The waiver, which involved telcos and other firms involved in mobile money transfers, was aimed at cutting down on the handling of cash and the attendant risk of Covid-19 being transmitted from person to person.
The telcos also stopped charging fees on person to person and Lipa na M-PESA transactions below Sh1,000; Bank to M-PESA wallet and M-PESA wallet to bank transactions and Zero-rated paybill tills for government hospitals and dispensaries.
Safaricom acting CFO Ilanna Darcy said they expect the revenue stream to pick up once the waiver is lifted but anticipate changes in consumer behavior which has dramatically shifted during the pandemic period to 26.8 million Mpesa customers.
“It would be pretty instantaneous to bounce back from the free cash transfers.The piece that is difficult to access for now however is changes in consumer behaviour. Customers have gotten used to the fact that there are no fees” Ms Darcy said.
Voice was also down 6.5 per cent and SMS dipped 6.9 per cent pulling down total revenue to Kes118.4 billion a 4.1 per cent decline from kes124 billion last year.
Mobile data as a result from working from home shot up 14.1 per cent from Kes19.5 billion in the half of 2020 to kes22.2 billion this year.
Safaricom CEO Peter Ndegwa said over 300k homes passed on home fibre with more than half of those being connected.
“The company is targeting to pass one million homes and offices in the next five years as part of our strategy.” He said
